United Adds Incentives on Buyout Plan

In an attempt to minimize layoffs later this year, United Airlines is asking employees to consider taking a buyout. To incentivize voluntary exits, the airline is offering a health care credit and travel benefits.

Although “thousands” of reported employees have already accepted exit plans from United Airlines, the Chicago-based company may be warning workers that more volunteers are needed. Reuters reports the airline is adding additional incentives to entice more employees to leave the company.

Flight benefits, healthcare and health credits on the table

The additional incentive offers come from an internal United e-mail obtained by Reuters. In the communication, the carrier claims while thousands have already accepted buyout packages, many more would have to volunteer to avoid a round of layoffs anticipated in October 2020.

“While we’re seeing some glimmers of hope in the number of customers traveling, we know that we are still a very long way from returning to where demand was at the end of 2019,” an unnamed person at United wrote in the e-mail, as quoted by Reuters. The message went on to say the aviation industry as a whole did not anticipate a quick turnaround.

To try and drive more employees to accept a voluntary end to their employment, United is reportedly offering a $1,500 health credit for every year they worked for the carrier. This fund would allow employees to pay for doctor’s visits and prescription medication. For senior employees, the number could reach up to $45,000.

The additional health care fund is in addition to other benefits being offered by United, including retirement and travel benefits aboard the airline. According to the communication, the deadline to accept buyouts is July 8, 2020.

Layoffs Could Begin in October 2020

Under the CARES Act funding United received, the carrier cannot legally force layoffs until after October 1, 2020. However, the airline has strongly indicated that if they can’t reduce staff through voluntary buyout means, the airline could be forced to forcibly reduce their numbers in the fourth quarter. United previously noted up to 30 percent of their staff could be let go.

United has not provided a public comment on the alleged buyout offers. Labor unions representing United employees, including the Air Line Pilots Association, the Association of Flight Attendants-CWA and Teamsters Airline Division have not publicly commented on the buyout opportunities.